Federal Reserve Scandal Bigger than ACORN

by Cliff Kincaid

On “The O’Reilly Factor” on Wednesday night, Democrat Rep. Barney Frank dropped a bombshell about the ACORN scandal that has not been disputed by Congressional Republicans – the group received $14.2 million in funding from the Bush administration.

 

But the question of what the Federal Reserve is doing with trillions of taxpayer dollars makes the ACORN scandal look like peanuts.

 

For the first time, a hearing is being held on Rep. Ron Paul’s Federal Reserve Transparency Act of 2009 (H.R. 1207) by the House Committee on Financial Services

. Grass-roots pressure has been credited with forcing the hearing into what has happened to trillions of dollars supposedly spent by the Federal Reserve on the stabilization of the financial system.

 

In prepared testimony, Thomas E. Woods, Jr. of the Ludwig von Mises Institute offers his strong support for the bill and declares, “…if our monetary system were really as strong, robust, and beyond criticism as its cheerleaders claim, why does it need to rely so heavily on public ignorance? How can it be a sound banking system that depends on keeping the public in the dark about the condition of its financial institutions?”

 

As the unprecedented hearing was taking shape, however, Rep. Frank put a statement on the website of the House Committee on Financial Services, which he chairs, going into detail about Republican funding of ACORN.

 

He declared, “ACORN was the recipient of funding throughout the Bush administration, with $14.2 million going from the Bush administration to ACORN through HUD. And I can attest that this was an entirely Executive Branch decision: No congressional action in any way, shape or form required that any of these funds go to ACORN as opposed to other organization [sic]. And I do not remember, during the period from 2001 to 2006 when the Republicans controlled the White House, HUD, the House and the Senate, and ACORN was receiving millions of dollars, any Republican objection to this.”

 

The ACORN scandal was exposed by the BigGovernment.com website, which is now urging donations to a legal defense fund for the filmmakers, who are being sued by ACORN.

 

Meanwhile, some conservative Catholic groups have been putting pressure on the Catholic Campaign for Human Development (CCHD), which gave ACORN $7.3 million over the last ten years, to de-fund other groups that engage in activities inconsistent with Catholic teaching.

 

Rob Gasper, the founder of Bellarmine Veritas Ministry, launched an investigation which found that the CCHD had funded groups advocating abortion or prostitution, or both.

 

As a result, on the insidecatholic.com website, prominent Catholic writer and thinker Deal W. Hudson has called for the elimination of the Catholic Campaign for Human Development, saying, “No amount of house-cleaning is going to make this arm of the USCCB [United States Conference of Catholic Bishops] worthy of our donations.”

 

While the ACORN scandal involves tens of millions of taxpayer dollars and became a national scandal because of the BigGovernment.com videos, some other videos that examine what has happened to trillions of dollars involving the Federal Reserve have become increasingly popular. These videos, however, don’t involve undercover footage. Rather, they show Rep. Alan Grayson trying to pin down government officials at congressional hearings on what has happened to the missing money.

 

In an exchange captured in a a YouTube video, Grayson questioned Fed Vice Chair Donald Kohn about Federal Reserve officials distributing $1.2 trillion dollars since September 2008, without reporting where they lent the money. In another video, Grayson questioned Inspector General of the Federal Reserve Elizabeth Coleman about where the money has gone and whether anyone is overseeing the activities of the Federal Reserve.

 

While Grayson is a liberal Democrat, he decided to co-sponsor the bill sponsored by Republican Rep. Ron Paul, the Federal Reserve Transparency Act of 2009, which requires an audit of the Federal Reserve System, including its Board of Governors, and the Federal Reserve banks.  

 

Paul had announced on July 15th that all 178 Republican members of the House had signed on as co-sponsors of his Federal Reserve Transparency Act.  

 

The House Committee on Financial Services’ hearing on the bill on September 25th also features testimony from Scott Alvarez, General Counsel, Board of Governors of the Federal Reserve System, and comes seven months after the bill was introduced and referred to the committee.

 

The bill currently has 295 co-sponsors, meaning that 117 Democrats have also endorsed the measure.

 

On the Senate side, a similar bill, S. 604, sponsored by Sen. Bernie Sanders, has 28 co-sponsors. It was referred to the Senate Committee on Banking, Housing, and Urban Affairs on March 16 but no hearings have been held on the Senate side.

 

Though introduced by a self-declared socialist, most of the Senate co-sponsors are Republicans, demonstrating that concern about the activities of the Federal Reserve crosses ideological lines.